According to information from Reuters, the world’s largest crypto exchange Binance has been trading for customers in Iran for years, despite US sanctions. In interviews, seven traders said they circumvented the ban. Until September, they would have used their Binance accounts. Their access was only lost when the crypto exchange tightened its anti-money laundering controls.
Until now, according to traders, customers could trade on the platform by simply registering with an email address.
Four years ago, the United States unilaterally withdrew from the 2015 nuclear deal with Iran under then-President Donald Trump. As a result, Iran no longer met all the requirements. The nuclear deal is intended to prevent Iran from building nuclear weapons. Iran has always denied such intentions. In November 2018, Binance informed dealers in Iran that the services were no longer available to them. They should close their accounts.
Email address was enough to open an account
“There were some alternatives, but none of them were as good as Binance,” said Asal Alizade, a trader in Tehran, of the crypto exchange. You used the exchange for two years until September 2021. “No identity verification was required, so we used them all.” Pooria Fotoohi, who lives in Tehran and says he runs a hedge fund, said he used Binance from 2017 to September last year. Binance convinced the Iranians because of its simple “know-your-customer” checks. Sellers could have opened an account by providing an email address.
Eleven other people shared on their LinkedIn profiles that they too had traded cryptoassets after 2018. However, none of the people responded to questions. Within Binance, the popularity of the exchange in Iran was known. Old employees knew about the popularity, according to emails they sent each other in 2019 and 2020.
The company itself kept a low profile: Binance did not answer questions about Iran. In a March blog post published in response to Western sanctions against Russia, the company said, among other things, that it strictly adheres to international sanctions rules. Iran’s mission to the United Nations in New York did not respond to a request for comment.
Crypto Exchange Without Headquarters
The crypto exchange, whose holding company is located in the Cayman Islands, says it has no headquarters. Details of the company behind the major exchange Binance.com, which does not accept clients from the US, are not given. Instead, US customers are being redirected to a separate platform, Binance.US, which, according to a mandatory announcement from 2020, will eventually be operated by Binance founder and CEO Changpeng Zhao.
From the lawyers’ point of view, this corporate structure means that Binance is protected from direct US sanctions that prohibit US companies from doing business in Iran. Because traders in Iran use Binance’s main exchange, which is not a US company. However, according to lawyers, Binance takes the risk of so-called secondary sanctions. These are intended to prevent foreign companies from doing business with sanctioned companies or to help Iranians circumvent the US trade embargo. Such sanctions can not only damage a company’s reputation but also cause it to lose access to the US financial system.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
